Democrats Weigh a Tax on Billionaires’ Unrealized Capital Gains

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As Democrats race to find ways to pay for President Biden’s social spending plans—especially as one of his own, Arizona Senator Kyrsten Cinema—is thwarting his efforts to raise corporate and individual tax rates. different tax.

Billionaires may be taxed on unrealized capital gains on liquid assets, Democratic officials yesterday. It will affect people with $1 billion in assets or who report at least $100 million in revenue for three consecutive years, according to news reports. That will trap perhaps 700 taxpayers — or the richest 0.0002 percent — but Democrats hope to have at least $200 billion in revenue within a decade. It would cover not only stocks but also other assets such as real estate. (Individuals can claim deductions for annual losses in the value of their assets.)

  • A key selling point of the offer is that it is normally not taxed and billionaires often borrow money to spend large sums of money at very little relative cost.

The idea has been around for a while. Senator Ron Wyden, chairman of the Senate Finance Committee, whose proposal is expected to be announced this week, has been working on various versions of the plan for two years. And Senator Elizabeth Warren is a more comprehensive version an unrealized capital gains tax during his presidential run. “Raising rates will not cause Jeff Bezos to pay a penny more,” he said. Warren told MSNBC: yesterday. What we need is a tax that focuses on the wealth of the richest Americans.”

But it faces many challenges. Republicans, who have long opposed taxation of unrealized gains, argue that it would create massive bureaucracies and be difficult to enforce. It’s also not clear that every Democrat would be on board with such a move—and with very thin majorities in Congress, every Democrat vote will be needed if Biden and his allies hope to pass their spending plans along party lines.

PayPal has given up on its Pinterest takeover. The digital payment giant said not looking for a dealThey said people briefed on the subject could be worth $45 billion. While Pinterest shareholders appeared to support a deal, PayPal investors were decidedly cooler based on the companies’ recent stock performances.

Another tough day for Facebook. Frances Haugen, former product manager shared thousands of pages internal company documents with journalists, Testifying in the UK Parliament as part of a European tour today. Meanwhile, more news is emerging from the leaked documents, including that Facebook employees are aware that their platform is being used for: spreading misinformation and hate speech in USA and India.

Moscow is accused of launching a new cyber surveillance campaign. Russian intelligence agency behind SolarWinds hack kicks off a broad new effort Microsoft officials and cybersecurity experts have warned to target thousands of US government, corporate and think tank computer networks. Its apparent focus is stealing data stored in the cloud.

Citigroup acknowledges the racial equality audit. It will be the first major bank to ask foreigners to examine whether they have business policies. contribute to racial discrimination. Others, like BlackRock, do this type of self-examination. pressure from investors Following the 2020 racial justice protests, other Wall Street firms have called these inspections unnecessary.

The fate of the world’s oldest bank gets even more blurred. UniCredit said last night that it has abandoned efforts to buy Italy’s troubled Monte dei Paschi di Siena after talks with the Italian government. collapsed. This forced Rome to come up with complex alternative measures by 31 December.

Esports conglomerate FaZe Clan, announced today He said it would go public by merging with a SPAC in a deal worth about $1 billion. Founded in 2010, FaZe Clan is an influencer marketing agency, e-commerce company, and esports team. (The company’s CEO, Lee Trink, once described “Dallas Cowboys meets Supreme, meets MTV”). It will be one of the first leading esports companies to go public and will likely grab the attention of retail traders. auxiliary fuel SPAC frenzy.

FaZe wants to combine sports, media and marketing. Trink is a former Hollywood entertainment executive. Worked at Kid Rock The company’s 85 influencers living together in California player composition, create viral social media clips, compete for money and accolades in professional gaming leagues, and loyal fan base. FaZe followed suit by launching an online store and branded products and signing advertising deals. With the likes of Burger King.

“We didn’t spend a lot of time really thinking about a traditional IPO strategy.” Trink stated in an interview that a SPAC deal allows FaZe Clan to talk about future opportunities as it prepares to go public, but a traditional IPO will not. Unprofitable FaZe generated approximately $38 million in revenue last year and expects to generate more than $50 million this year. Trink said FaZe will use the SPAC to “double up” the content.

“This is just the beginning of the game’s further rise to the cultural zeitgeist.” added. The $176 billion video game industry exploded during the pandemic, but some concerns may slow down sales as the pandemic subsides. The future of e-sports is expected billion dollar business this year; already, esports team Evil Geniuses has received an investment from China’s Fosun Sports Group was worth more than $250 million.

A do-or-call moment for climate change: The annual climate summit COP26, hosted by the United Nations, begins next Sunday in Glasgow. As the chairman of the meeting said,either sink or get out“The moment to tackle climate change, world governments will come together to work new targets to reduce carbon emissions. However, major carbon emitters such as China, Australia, Russia and India has not yet submitted new commitments to reduce its pollution.

More vaccines: on Tuesday, a FDA advisory committee It is expected to discuss emergency authorization of the Pfizer vaccine for children ages 5 to 11. The White House has said it is ready to do so. rapidly disseminating vaccines for children If authorized by the FDA and CDC

State of the economy: The Commerce Department will release data on US gross domestic product on Thursday. Economists expect the report to show economic growth slowing over the summer, reaching nearly 0.9 percent in the third quarter. They will look for evidence that supply chain disruptions and labor shortages are limiting recovery and boosting inflation.

Speaking of supply chains: This week’s corporate financial reports may shed new light on the severity of pandemic-related illnesses global shortage of supplyaffecting everything from cars iPhones and contributed to inflation. GE and Microsoft will report tomorrow; Coke and GM on Wednesday; and Amazon, Apple, Anheuser-Busch InBev and Ford Motor on Thursday. In the meantime, you may want to start your own business. holiday shopping.

– Tara Jones, a Amazon warehouse employee sent an email to then-CEO Jeff Bezos last year. Email is out An internal investigation that finds Amazon it was replacing new parents, patients dealing with medical crises, and other vulnerable workers on leave.

While corporate America is committed to being greener, the systems behind the most popular cryptocurrencies, Bitcoin and Ether, are energy-intensive by design. This created an image problem for crypto, forcing the industry to fight for a solution.

“Immediate progress on decarbonization is needed” was the result a new report By sustainability researchers and crypto industry players, including the University of Cambridge Center for Alternative Finance, the Green Bitcoin Project, and Digiconomist. However, the report added that the data currently available is “not generally understood and can be taken out of context.” Because crypto’s carbon footprint is a “partisan and highly emotional issue,” the information and discussion surrounding it is not “clear and logical.”

This is primarily a Bitcoin and Ethereum issue, According to Alex DeVries, founder of Digiconomist and who studies the energy consumption of crypto. “The impact of these two reflects poorly on the rest of the cryptocurrency landscape,” he said in a statement. The authors of the report say that greening cryptocurrency is relatively easy, at least at the technology level, and other parts of the cryptocurrency community are working to address the problem.

Opportunities

  • Goldman Sachs has offered top executives, including CEO David Solomon, huge holding bonuses a year after cutting their salaries over the 1MDB scandal. (NYT)

  • HSBC will buy back $2 billion of its stake after the British bank announced better-than-expected financial results. (FT)

  • Brex, which provides fee cards to start-ups, raised $300 million at a valuation of $12.3 billion. (TechCrunch)

  • Hertz has reportedly placed an order for 100,000 Tesla. Submitting shares of the electric vehicle maker rose more than 4 percent in premarket trading. (Bloomberg)

Policy

  • New data shows how a World Health Organization plan to provide Covid vaccines to poorer countries has failed. (FT)

  • An upcoming Supreme Court case will reveal how judges will address the issue of religious exemptions to government vaccination duties. (vox)

  • “Meet donors at the center of a Congressman’s latest indictment” (politics)

best of the rest

  • Wall Street is increasingly betting that the age of cheap oil is over. (Bloomberg)

  • The darling of this year’s Milken Institute Global Conference was not one of the participating financiers. The outspoken columnist was Bari Weiss. (FT)

  • “Sneakers made $70 billion last year. Black retailers saw very little of it.” (NBC News)

We want your feedback! Please email your thoughts and suggestions. dealbook@nytimes.com.

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